34. A Bill Declaring Bills of Credit to Be Equal to Gold and Silver Coin of the Same Denominations
Be it enacted by the General Assembly, that the bills of credit emitted by the American Congress, so long as they continue current by the same authority, and the like bills emitted by act of General Assembly, may be paid in discharge of all demands due in money, every four pence, contained in the denominations of the said bills, being computed equal to three pence of sterling money, or of the lawful money of England, and to four pence of the lawful money of this commonwealth: And a tender of any sum in such bills, or in bills of credit emitted or to be emitted by acts of General Assembly, to any creditor, or to the factor or agent of a creditor residing in foreign parts, with whom the contract, by which the debt or demand arose, was made, or to any other person authorised to receive the same, shall be as effectual as a tender of the like sum in gold or silver coin of the legal standard, according to the proportions aforesaid, or as a tender to the creditor himself.
Report description begins Report of the Committee of Revisors Appointed by the General Assembly of Virginia in MDCCLXXVI, Richmond, 1784 description ends , p. 29. MS (ViU); clerk’s copy.
In May 1777 the General Assembly passed an Act making bills of credit issued by Congress or by the state legal tender, stipulated penalties for refusal to accept such at an equal rate with gold or silver, provided that a tender of payment and refusal to accept in bills of credit would amount to an extinguishment of interest, and established the rate of exchange for debts payable in sterling at 33⅓% (Hening, description begins William W. Hening, The Statutes at Large; Being a Collection of All the Laws of Virginia description ends ix, 297–8). In May 1779 that part of the Act making it a penal offense to ask more for an article in paper money than in gold or silver was repealed (same, x, p. 125). The purpose of Bill No. 34 in the Report of the Committee of Revisors, in briefer form, is substantially to reenact the Act of May 1777. The Bill was presented by Madison 31 Oct. 1785, but apparently no further action was taken on it (JHD description begins Journal of the House of Delegates of the Commonwealth of Virginia (cited by session and date of publication) description ends , Oct. 1785, 1828 edn., p. 12–15). Another bill touching upon exchange is of particular interest in view of the fact that the general sequestration Act of 1777 provided that debts due British subjects from citizens of Virginia could be paid into the loan office; i.e., that sterling debts could be paid in Virginia bills of credit (Hening, description begins William W. Hening, The Statutes at Large; Being a Collection of All the Laws of Virginia description ends ix, 377–80; see above under date of 13 Jan. 1778). This was a bill for settling the rate of exchange and mode of judgments on foreign debts; TJ was a member of the committee appointed 19 May 1779 to prepare it. It was brought in 15 June and passed its second reading, but was ordered to be postponed to the next session (JHD description begins Journal of the House of Delegates of the Commonwealth of Virginia (cited by session and date of publication) description ends , May 1779, 1827 edn., p. 14, 49, 50). The MS (Vi) is entirely in George Mason’s hand and is as follows:
“Whereas many Merchants in Great Britain and other parts beyond the Seas, having Effects or Property within this Commonwealth, unjustly indebted to the Citizens of this and other of the united American States, in considerable Sums of Sterling Money, and in other Money of the Denomination of forreign Countrys, and have since the Year one thousand seven hundred and seventy five, protested, or may hereafter protest their Bills for the same, with Design to discharge such Debts here, at the nominal Rate of Current Money, in it’s depreciated Value; and it is necessary that some just and certain Mode of discharging such Debts shou’d be established, to prevent the Disputes and Difficulties, which may otherwise arise: Be it therefore enacted by the General Assembly, that in any Suit which shall be commenced and depending, in any Court of Record within this Commonwealth, for the Recovery of Money due upon any Bill of Exchange, which hath been, or shall be drawn and protested, from and after the first Day of January in the Year one thousand seven hundred and seventy six, or for any Debt due from a Merchant or Subject of Great Britain, or any other forreign Country to any Citizen of this or any other of the United States, wherein the Plaintiff or Plaintiffs shall recover, such Court shall have Power, and are hereby directed, to render Judgment for so much Sterling Money, or other Money of the Denomination of any forreign Country (as the Case may be) as shall appear to be justly due, and by Rule, to be entered at the foot of their Judgment, in such Suit, to order such Judgment to be discharged, or levyed in Current Money, at such Difference of Exchange as they shall think just, having Regard therein to the true Value or Rate (at the time of such Judgment) of good Bills of Exchange drawn on the Country, or Place, where such Debt became due; any Law, Usage, or Custom, to the contrary thereof, in anywise, notwithstanding.”